The competitive advantage of corporate reputation


According to a recent report by the Reputation Institute (a consulting firm specialising in reputation management) corporate reputation can be an additional source of competitive advantage.

The report shows that the motivation to support an organisation – for example, through purchase, referral, positive word of mouth and benefit of the doubt in crisis – is not, in the main, influenced by products and services. Out of the seven dimensions of corporate reputation, the report finds that products and services and innovation together only account for on average 30-45 per cent of the overall reputation.

The remainder is accounted for by the corporate dimensions: the company and people behind the products. The Institute finds that the leading companies of the world recognise that competitive advantage is created by reputation, image and trust – products are merely a ticket to enter the market. The report measured the reputation of 100 leading global companies among consumers in 15 countries; the ranking below right shows the results.

The Reputation Institute says that these companies have embraced their reputation as an important asset and will continue to carefully manage how they are perceived by all stakeholders across all countries and business units. These leading companies communicate and act in a way valued by their stakeholders, and are creating a balanced approach across the dimensions of corporate reputation - and they are rewarded by trust and business across products, markets and cultures. All companies have a reputation, be it good or bad: this report argues that it can be measured and actively managed. Taken from The 2011 Global RepTrak 100: Results and Report

Facts & Figures Archive